Improve Your Currency Conversion Skills with Accurate Practice

There are many facets to currency conversion, and although it may appear daunting at first, you will see it's manageable once you get to know the types of questions and formats. Another way of improving your speed and accuracy in currency conversion is to practice other types of numerical reasoning - this will sharpen closely related capabilities. 

Usually, currency exchange data is presented in tables. The first type of currency table simply specifies other currencies with respect to one currency whose value is assumed to be 1.

In this case, the table's title is therefore: 'Currency exchange rates per 'x'.

Currency exchange rates per 'x'

Consider the following form:

 In this table, looking at the first value: 1 AUD is worth 0.651 GBP, and 1 GBP is worth 1.5354 AUD.

Another example of this form is the following table:

 In this table, 1 AED is worth 0.272300 USD, and 1 USD is worth 3.6724 AED.

Another popular table includes a group of currencies which are compared to each other within the table's columns. This table is sometimes more confusing at first, but learning its concept is fairly easy:

To avoid confusion, make sure to use the left-most column as the reference point.

Choosing a currency from that column, means you are now comparing the value of one unit of that currency to other currencies within that row.

A rule of thumb could be adding the digit 1 before each currency on the left-most column.

For example, if we look at USD in the left-most column, and then compare it to currencies within the first row, we are actually comparing the value of 1 USD to other currencies including USD. In this case, USD is weaker than all other currencies as one unit of it is worth less than 1 of any other currency, with GBP being the strongest:

1USD=0.6292GBP

Moving on to row 3 in the left-most column, we see that 1 GBP is worth 1.5896 USD, which is the inverse of the aforementioned value.

When using the sentence 'USD to GBP conversion rate is' we actually mean that with each USD you can buy x GBP, with USD assumed to have a value of 1.

1 USD = 0.7155 EUR. The EUR is stronger than the USD. When compared to 1 USD its value is lower than 1.

Applying this pattern you can switch between any 2 currencies as well as using additional third currency as a converting factor. 

Let's check out some currency conversion questions. These are not the hardest questions, but they should give you an idea of what's in store for you on your test.

Sample Question 1

Which of these amounts is bigger: 40 pence or £0.70?